Do I need business property insurance?

If your business operates out of any location zoned commercial, or out of any location other than your car or your home, the answer is yes. Even businesses that operate out of leased commercial properties, which are (or should be) insured by the property owner, should carry some level of business property insurance. Property insurance covers everything within the four walls of the business property, including inventory, parts and materials, furnishing, electronics, and even storefront glass. It will also apply to other property owned by the business, such as construction equipment. A good rule to follow when choosing property insurance coverage levels is: “expect the best while you prepare for the worst.” If a hurricane, tornado, or fire destroyed your business and everything in it, would your business insurance coverage be enough to replace it down to the last nut and bolt? If not, property insurance coverage levels must be increased. If your business already has a property insurance policy in place, an umbrella policy may be purchased as a supplement. Also, keep in mind that your business property insurance may not extend to cover damages from floods or earthquakes. If you live in an area that is prone to either of these natural events, you may consider purchasing a separate policy to cover these incidents. Business interruption insurance is another useful supplement to business property insurance, since it can assist with the expenses associated with moving a business to a temporary location, as well as with replacing revenues lost due to a cessation of operations.

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